Inheriting from a Japanese estate can be costly, because Japan has one of the world’s highest inheritance taxes — up to 55%, charged on each heir. A UK resident inheriting Japanese-situated assets can be liable, the return is due within 10 months of the death, and the yen proceeds are then converted into sterling, usually through a specialist currency broker rather than a bank.
Who this guide is for
This guide is for UK residents inheriting money, property or investments in Japan — typically British-Japanese families, and the families of British expatriates who lived and worked there. It covers how a Japanese estate is settled, the inheritance tax that can apply even to a non-resident heir, the UK position, and how to protect the sterling value of the inheritance as it moves.
Japan is unusual among the corridors we cover because its inheritance tax is both high and capable of reaching a UK-resident heir. Getting the tax and the timing right matters, and so does the exchange rate on the yen. For the wider picture, see our guide to receiving an inheritance from abroad.
How does inheriting from a Japanese estate work?
Japan does not use an English-style grant of probate. The heirs are identified through the family register (koseki), and where there is no will, or the will does not divide everything, the heirs enter into an estate-division agreement (isan bunkatsu kyogi) setting out who takes what. Assets such as real estate are then re-registered into the beneficiaries’ names.
The single most important date is the tax deadline. The inheritance tax return must be filed, and the tax paid, within 10 months of the date the heir learns of the death. Where the deceased held assets in both Japan and the UK, the two estates are typically administered separately.
How much Japanese inheritance tax will you pay?
Japan operates an acquisition-based system: each heir is taxed on the value of what they actually receive, on a progressive scale that runs from 10% up to 55%. Before the tax is calculated, a basic deduction applies: ¥30,000,000 plus ¥6,000,000 for each statutory heir.
| Taxable portion per heir (after deductions) | Rate |
|---|---|
| Up to ¥10 million | 10% |
| Up to ¥50 million | 20% |
| Up to ¥100 million | 30% |
| Up to ¥300 million | 45% |
| Over ¥600 million | 55% |
The table shows a representative selection of the eight bands. The top rate of 55% is frequently cited as the highest headline inheritance tax rate in the world, which is why planning and accurate valuation matter so much on a Japanese estate.
Does a UK resident pay Japanese inheritance tax?
Often, on the Japanese assets, yes. Japan’s rules on who is taxed are complex and depend on the residence and nationality of both the deceased and the heir, but as a general rule a heir living in the UK who inherits assets situated in Japan — a Tokyo apartment, a Japanese bank or securities account — is within Japanese inheritance tax on those Japan-situated assets.
This catches people out, because many assume a foreign heir is outside the Japanese net. Establishing the exact scope early — with a Japanese tax professional — is essential, both to file within the 10-month window and to know what will actually be left to convert into sterling.
What is the reserved portion (iryubun)?
Japanese law protects close family through a reserved portion, or iryubun. A spouse and children are entitled to a minimum share of the estate — generally half of what they would receive under the statutory default — regardless of what a will says. A will that ignores it can be challenged by the protected heirs.
For a British family, this is another reason to take Japanese legal advice early: it affects who is entitled to inherit, and therefore who must file and pay. It is a legal question, not a currency one, but it shapes the whole timeline.
Do you pay UK tax on a Japanese inheritance?
The UK does not tax you simply for receiving an inheritance from Japan, and there is no UK tax on moving the money into a UK account. UK inheritance tax can apply to the deceased’s estate, and since 6 April 2025 it turns on long-term UK residence rather than domicile, according to GOV.UK. Someone UK-resident for fewer than 10 of the previous 20 years is broadly outside the scope on non-UK assets.
Where both Japanese inheritance tax and UK inheritance tax apply to the same assets, UK unilateral relief can give credit for the Japanese tax paid, so the same value is not taxed twice over. The interaction is intricate, so our guide to UK inheritance tax for expats explains the 2025 reform, and tax on money transferred to the UK from overseas covers the receiving side. This is general information, not tax guidance — confirm your position with qualified advisers in both countries.
Ways to move a Japanese inheritance to the UK compared
Once the Japanese estate is settled and the yen is yours, the money still has to become sterling. After a potentially large Japanese tax bill, protecting what remains through the conversion matters all the more.
| Method | Typical exchange-rate margin | Forward contracts? | Best suited to |
|---|---|---|---|
| High-street bank | Around 3%–4% built into the rate | Rarely for private clients | Small, one-off amounts where convenience wins |
| Money-transfer app | Often under 1%, but limits and tiered pricing apply on large sums | No | Modest transfers within app limits |
| Specialist currency broker | Typically 0.2%–1%, tighter on larger sums | Yes — up to around 12 months ahead | Large inheritances with uncertain timing |
The margin is charged on the whole sum, so on a large inheritance the gap between a bank rate and a broker rate is frequently measured in thousands of pounds. Our comparison of a currency broker versus a bank sets out the trade-offs, and who gives the best exchange rates on large transfers looks specifically at high-value sums.
What is the currency risk on a yen inheritance?
The Japanese yen is a major, highly liquid currency, and GBP/JPY is driven largely by the interest-rate and policy differential between the Bank of England and the Bank of Japan. The yen has been through a period of pronounced moves as the Bank of Japan has shifted its long-standing ultra-loose policy, so the pace of change can be significant. For someone converting yen into pounds, a stronger yen means more sterling and a weaker yen means less.
The scale is easy to underestimate. A 2% swing in the exchange rate on a ¥50,000,000 inheritance is ¥1,000,000 — and the pound and yen can move by more than that over the months a Japanese estate takes to settle. To follow the pair when you are ready, see our guide to pounds to Japanese yen.
Worked example: converting a ¥50,000,000 inheritance
Suppose you inherit ¥50,000,000 from a Japanese estate, net of Japanese tax, and expect to repatriate it once the estate is settled. Using illustrative round rates:
- At an illustrative 190 yen to the pound, ¥50,000,000 converts to about £263,200.
- At 200, the same yen converts to about £250,000 — roughly £13,200 less.
- The only variable that changed is the exchange rate. The inheritance is identical.
A forward contract lets you fix a rate now for a conversion you settle later, turning that unknown sterling outcome into a known one. This is not a prediction that the rate will move in any particular direction — it removes the uncertainty entirely while the Japanese paperwork is completed.
How can you protect the exchange rate?
- Spot transfer: convert at the live rate once the yen is cleared and yours to move.
- Forward contract: fix today’s rate for a conversion up to around 12 months ahead, usually for a modest deposit — see how a forward contract works.
- Market order: set a target rate and convert automatically if the market reaches it.
Because the yen is a liquid major currency, forward contracts on GBP/JPY are readily available, which is useful given how much the pair can move around Bank of Japan decisions.
What mistakes do beneficiaries make?
- Assuming a foreign heir is outside Japanese tax: a UK resident inheriting Japan-situated assets is generally liable to Japanese inheritance tax on them.
- Missing the 10-month deadline: the Japanese return and payment are due within 10 months of the death, which is tight for a cross-border estate.
- Converting through a bank: a 3%–4% margin buried in the rate can quietly cost thousands on a large inheritance.
- Being unprepared for UK checks: a large incoming transfer triggers source-of-funds questions — see proof of funds on large international transfers and the documents you may be asked for.
Why does a specialist broker matter for a Japanese inheritance?
After a potentially heavy Japanese tax bill, protecting the sterling value of what remains is where a specialist earns its place. A specialist holds a tighter margin than a bank, offers forward contracts and market orders that banks rarely extend to private clients, and can time the conversion around the estate’s release of funds.
Cambridge Currencies operates through FCA-authorised partners, including Currencycloud (an authorised electronic money institution, FCA reference 900199) and ScioPay, so funds are handled within a regulated framework. If the estate includes property, our guide to buying and selling property in Japan covers the transfer mechanics, and for the wider picture, see transferring an inheritance from abroad to the UK.
Frequently asked questions
How high is inheritance tax in Japan?
The scale is progressive from 10% up to 55%, the top rate applying to the highest band. A basic deduction of ¥30,000,000 plus ¥6,000,000 per statutory heir applies before tax is calculated, and each heir is taxed on what they receive.
Do I pay Japanese inheritance tax if I live in the UK?
Generally, on Japan-situated assets, yes. The rules are complex and depend on the residence and nationality of the deceased and the heir, but a UK resident inheriting assets located in Japan is usually within the Japanese charge on those assets. Take Japanese tax advice.
When is the Japanese inheritance tax return due?
Within 10 months of the date the heir learns of the death. Both the filing and the payment fall within that window, which is tight for a cross-border estate.
Do I pay UK tax on money inherited from Japan?
You are not taxed simply for receiving the inheritance or transferring it into a UK account. UK inheritance tax applies to the deceased’s estate and, since 6 April 2025, depends on long-term UK residence. Where both countries tax the same assets, UK unilateral relief can credit the Japanese tax paid. Confirm your position with a qualified adviser.
Can I fix the GBP/JPY rate before the estate is settled?
Yes. The yen is a liquid major currency, so forward contracts on GBP/JPY are readily available. A forward can fix a rate for a conversion up to around 12 months ahead, usually for a modest deposit.
Speak to a specialist about your Japanese inheritance
Bringing an inheritance home from Japan? A Cambridge Currencies specialist can talk you through the current GBP/JPY rate, how to time the conversion around the estate settlement, and whether a forward contract fits your timeline — every transfer completed by phone with a dedicated broker. Get in touch for a quote to get started.
Related guides
Cambridge Currencies provides currency guidance and execution, not tax, legal or financial advisory services. Japanese and UK inheritance rules are complex and subject to change; confirm your position with qualified advisers in both countries. Services are delivered through FCA-authorised partners, including Currencycloud and ScioPay. Any exchange rates shown are illustrative and used only to explain the mechanics.
